The stay of infringement proceedings is mandatory in case of a simultaneous proceeding on the patent’s validity, according to the Court of Cassation

The Court of Cassation, by order no. 9500 of 04 April 2019, ruled again on the necessity of staying infringement proceedings when the proceeding on the patent’s invalidity is pending.

Schmid Rhyner AG, owner of a European patent, had filed a patent infringement and unfair competition lawsuit before the Court of Trento against Ecosystem Costruzioni srl. After the filing of the expert witness’s opinion, unfavourable for the plaintiff, the Court of Trento, on application by the plaintiff itself, had ordered the stay of the proceeding until the decision on a later invalidity proceeding pending on the same (Italian portion of the) patent before the Milan IP Court became final. The latter had been filed by Ecosystem Costruzioni srl.

In particular, the Court of Trento had given grounds for the stay stating that the validity question was prejudicial to the infringement one, and had rejected the defendant’s (now obviously interested, in view of the expert opinion’s conclusion, in a prompt conclusion of the infringement lawsuit) contrary arguments based on the remark that Ecosystem Costruzioni srl could have avoided the stay by filing the patent’s invalidity application as a counterclaim in the proceedings on infringement, instead of commencing an independent proceeding on the invalidity before a different Court (the issue of invalidity had also been raised in the infringement proceedings, but only by way of exception).

Against that order, Ecosystem Costruzioni srl filed an appeal before the Court of Cassation. In particular, the appellant argued the existence of a consolidated case law, opposite to the one followed by the Court of Trento, enabling the judge of the infringement proceedings to state obiter on the invalidity of the patent when the issue was raised in the proceeding by way of mere exception. In the appellant’s opinion, furthermore, the provision of the necessary stay under Article 295 of the Italian Code of Civil Procedure should have been applied restrictively, in order to avoid a conflict with the principle of the reasonable duration of the proceeding. Finally, the appellant complained that the litigation strategy of the patent owner constituted an abuse of proceedings: the latter had filed the application to stay proceedings at a very advanced stage of the litigation, upon learning the outcome of the expert witness’s opinion, concluding for lack of novelty and inventiveness of all the claims of the patent at issue as well as for no-infringement (this opinion was partially shared by the expert witness appointed in the simultaneous case before the Milan IP Court, which concluded for the validity of only one of the patent’s claims; based on this report, the patent holder had filed an application before the Court of Milan in order to limit the patent’s scope). 

The Court of Cassation, having recalled the case law on this issue, rejected the appeal. The Court upheld the prejudicial nature of the question of the patent’s validity, stating that – although in general a court hearing the infringement action, in response to an exception of invalidity of the patent being raised, can rule on the question obiter – in case of judgments pending simultaneously on validity and infringement of the same patent “the judge hearing the infringement action shall stay the proceedings under Article 295 of the Italian Code of Civil Procedure, as this provision constitutes an exception to the rule stated by Article 34 of the Italian Code of Civil Procedure concerning the power of a judge to rule obiter on all the prejudicial questions relevant to the decision”.

This, in line with a known precedent of the same Court, according to which, in applying Article 295 of the Italian Code of Civil Procedure, the only relevant issue is whether in the prejudicial proceeding the question must be decided with res iudicata effect.

Regarding the risk of an abusive use of the stay, in response to the appellant’s arguments, the Court of Cassation underlined that the right-holder had filed the application for stay once it realised the emerging partial conflict between the different expert opinions on the patent’s validity filed in the two judgements and that, therefore, an abuse of proceedings could be ruled out. In the Court’s opinion, the conflict had been caused, on the contrary, by the very belated stay of the infringement proceedings.

Based on the above, the Court of Cassation dismissed the appeal and set off the litigation costs of the proceedings.